New Plan For GHG Emissions Pricing In Shipping Aims For Net-Zero By 2050

A group of 47 governments, supported by the global shipping industry, has put forward a proposal for a new greenhouse gas (GHG) emissions pricing system for international shipping.

The plan aims to reduce the environmental impact of the maritime industry and help it achieve net-zero GHG emissions by 2050.

The proposal which has been submitted to the International Maritime Organization (IMO), suggests a system where ships on international voyages will pay an annual levy based on the amount of carbon dioxide equivalent (CO2e) emissions they produce.

The funds collected from this levy will go into a new “IMO GHG Strategy Implementation Fund” to support initiatives made to reduce shipping emissions worldwide.

The main goal of the proposal is to make zero-emission (ZNZ) marine fuels, like ammonia, green methanol, and hydrogen. The GHG levy will help reduce the price difference between these cleaner fuels and the cheaper, more polluting fossil fuels that are commonly used by ships.

The revenue generated from the levy will be used to reward the production and use of ZNZ fuels.

This funding will also go towards helping developing countries with their maritime decarbonisation initiatives, providing billions of dollars annually to support cleaner shipping practices in these nations.

The proposal has received support from major shipping nations, including Greece, Japan and Korea along with large flag states like the Bahamas, Liberia, the Marshall Islands, and Panama.

It has also been backed by the European Union and countries in Africa, like Kenya, and Nigeria along with Small Island Developing States from the Caribbean and Pacific.

The International Chamber of Shipping (ICS) has also given full backing to the proposal.

ICS Secretary General Guy Platten commented that this proposed pricing system is “the most effective way to incentivize a rapid energy transition in shipping” and to achieve the IMO’s goal of net-zero emissions by 2050.

The proposed GHG levy suggests three possible rates for ships to pay based on their emissions: $18.75, $100, and $150 per tonne of CO2 equivalent emissions. These rates will be reviewed and finalised during upcoming IMO meetings.

If the plan is approved, the levy will start in 2028, with contributions collected annually from ships. The revenue will fund the development and adoption of cleaner fuels, helping the shipping industry transition to zero-emission technologies.

The proposal will be discussed at the Intersessional Working Group on Reduction of Greenhouse Gas (GHG) Emissions from Ships (ISWG-GHG 18) meeting in February 2025.

Afterwards, it will be reviewed at the 83rd session of the Marine Environment Protection Committee (MEPC) in April 2025. If approved, the plan will be implemented globally in early 2027.

The proposal strengthens earlier measures, like the introduction of a goal-based fuel standard that will help in the shift towards cleaner, less carbon-intensive fuels.

If adopted, the proposed changes will be added to the MARPOL Convention, the international treaty that regulates pollution from ships.

While most governments and the shipping industry support the proposal, some countries are concerned about the same. The proposal’s supporters are working together to address these concerns and ensure that all IMO member states are on board before the final decision is made.

Reference: International Chamber of Shipping

Source: Maritime Shipping News